Tuesday, April 17, 2012

A “Fair” Alternative to the Buffett Rule

With
Obama having very little to show for his first term in office, his
strategy for reelection seems to be promoting tax “fairness.”
The one and only plank in his tax fairness platform is the so-called
“Buffett Rule” which is new type of alternative minimum tax that
will require people who earn more than $1,000,000 per year to pay the
same tax rate as “everyone else.” It's a nice sounding soundbite
but it's a strategy that would be hard to execute.

First
off, nearly ½ of the people in the US pay NO federal income taxes at
all. So why should I take seriously any claim that it's millionaires
who aren't paying their fair share? After all, even 10% of
$1,000,000 is infinitely more than 100% of nothing. If we're aiming
for fairness, it's those people who pay nothing who aren't paying
their fair share. The millionaires are paying for many of the
benefits that the free-loaders are using. The Occupy Movement should
be happy they have it so good. Instead, they whine about needing
more. They now want the 1% to pay for their college, their health
care, and even their homes. I guess by “fair” they mean someone
else should pay their bills.

When
the President talks about fairness, he's not talking about the 50%
that pay no taxes. He's talking about the rate that millionaires pay
compared to the rate that middle class workers pay. According to the
President, if someone makes $1,000,000 per year, he should pay at
least 30% of his income in taxes. Hmmm. What about people who make
$900,000 per year? Is is OK if they only pay, say, 20% when
millionaires are paying 30%?

When
Mr. Obama released his tax returns for 2011, we saw that he actually
paid a lower rate than his secretary (source).
White
House spokesperson Amy Brundage said of Obama's return, “[this]
is
exactly why we need to reform our tax code and ask the wealthiest to
pay their fair share.”
That's odd. The Buffett rule would not have made a difference for
the President since his income was less than $1,000,000.

In the
US, we use marginal tax rates. Otherwise, a person who makes exactly
$1,000,000 in one year would net less after taxes than someone who
made $995,000. The way marginal tax rates work is that as people
make more and more money, they enter progressively higher tax
brackets and pay a larger percentage of taxes only on the amount they
earn in the higher brackets. It's a rather cumbersome
system but that's the way it works.

Liberals
have taken advantage of the tax code to engage in social engineering.
This way, they can entice people into buying an electric car, for
example, by giving tax subsidies to people who buy them. With so
many pages in the tax code, numerous tax credits, tax deductions, and
loop holes, people in the higher tax brackets never pay taxes on
their entire income.

The
purpose of taxes is to raise money for the government but liberals
don't give a whit about revenue. Even if passed, the Buffett Rule
would only raise about .43% (less than half of one percent) of our current deficit. Democrats are
trumpeting the Buffett Rule only out of some absurd sense of
“fairness.” It will not address out of control spending. It
will not create jobs. It doesn't do anything except punish
millionaires and give the President something to run on besides his
failed domestic policies. It's class warfare at its worst.

If tax
fairness is the objective, then I have an even more “fair”
alternative to the Buffett Rule. Let's do away with all tax
deductions, tax credits, and tax loop holes, then go to a flat tax of
15%. This way, millionaires and billionaires pay the same as their
secretaries; middle class workers will pay less taxes; and all those
people who don't pay any taxes will finally end up paying their
fair share.

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RKBentley

About me

I'm a husband, a father, and a Christian. Being a Christian is not something I do on Sundays but rather it is who I am. My faith influences everything I do. Christians are commanded to always be ready to give an answer – a reason for the hope that is in us. I take that command seriously. Psalm 19:7 says that the testimony of the LORD is sure. If we base all of our thinking on the Bible, we can't go wrong. I started this blog to encourage other Christians and challenge critics on a variety of issues. Whether you agree or disagree with me, you're welcome here. Please follow me on Twitter and friend me on FaceBook! God bless!!